Overall retail sales increased in April but foodservice sales slipped. Holiday business is not all that important to many independent operators. Kona Grill to test a smaller version of their restaurant. Comparable store sales reports this week on more than a dozen restaurant chains. These stories and a whole lot more This Week In Foodservice.

The U.S. Census Bureau reported that overall retail sales rose 0.3 percent in April from March. Retail sales were up 4.7 percent from April 2017. And, in the first 4 months of this year retail sales are up 4.6 percent. The Census Bureau revised the advance sales number for March from +0.6 percent to +0.8 percent

Sales at food services and drinking places were down 0.3 percent in April. Compared to April of last year sales rose 3.8 percent. In the first 4 months of 2018, restaurants and bars show a sales rise of 3.8 percent.

The Census Bureau revised foodservices sales for March from +0.4 percent to +1.2 percent, which is a significant increase. This revision may have an impact on the negative sales number for April with March sales coming on strong.

There are some considerations to bear in mind when looking at this data. The Bureau classifies this as an “advance report” since it is based on a small sampling. The Bureau can revise findings when a larger sampling is received. Note the change from March noted above.

The Bureau surveys restaurants and bars only. Not included are hotels, resorts, retailers (c-stores, etc.), employee feeders, healthcare, schools and universities or military foodservice. Thus, 30 percent to 40 percent of the industry sales are not studied.

Some of the sales figures are adjusted for seasonal changes, holidays and trading days but not for menu price changes.

Economic News This Week

Initial jobless claims rose 11,000 to 222,000for the week ending May 12. The 4 week moving average fell by 2,750 to 213.250. This is the lowest this average has been since Dec. 13, 1969. The number of claims filled continues to indicate the U.S. jobs market remains strong.

The Philadelphia Federal Reserve Manufacturing Business Outlook Survey indicated growth for May. The Index rose 11.2 percentage points to 34.4, up from 23.2 in April. (Any number greater than zero means increasing activity.) The New Orders Index jumped 22.2 percentage points to 40.6. The Shipments Index was not as dramatic but it did show an increase from 23.9 in April to 25.8 this month. The Unfilled Orders Index just about doubled from 7.8 last month to 15.3 in May. The Employees Index rose to 30.2 in April to 30.2 and the Average Employee Work Week increased to 34.4 in May from 21.6 in April.

Privately owned housing building permits fell 1.8 percent in Aprilfrom March but increased 7.7 percent over April 2017. Single family housing permits issued were up 0.9 percent for the month. April Housing Starts were down 3.7 percent from March while rising 10.5 percent over April last year. Single family housing starts rose 0.1 percent over March.

Foodservice News This Week

A new study finds little variation in “special occasion” sales at independent restaurants.Womply, a purveyor of front office software for small and medium size businesses, has launched a State of Local Restaurants report that tells independent operators how their sales patterns compare to other operations. The major finding is that sales patterns don’t fluctuate as much as believed. For example, no particular day accounts for more than one half of one percent of annual sales and the average weekend’s sales are bigger than most prominent holidays.

Kona Grill is working on a smaller prototype.The new design is around 5,000 to 5,300 square feet, which will allow more flexibility in real estate as well reducing build-out and occupancy costs. The current Kona Grill is about 7,000 square feet.

Starbucks will ask about 500 employees to work for Nestle.Nestle and Starbucks agreed to have Nestle take over the marketing of the Starbucks brand in grocery stores and other retail outlets while Starbucks concentrates on the foodservice operation. None of the current Starbucks employees will have to relocate as the Nestle business will be headquartered in Seattle.

Growth Chains. Gloria Jean’s Gourmet Coffees has signed a master franchise agreement that will open 190 locations in the next 10 years with 13 stores to open in the next 12 months. Teriyaki Madness plans to open 100 restaurants in Mexico. QuikTrip c-stores plans to open 9 stores in Central Texas. Starbucks will add 600 stores in China annually until they reach a total of 6,000 locations. Pizza Hut has signed a franchising agreement with Telepizza for 1,300 units particularly to accelerate growth in the Caribbean, Spain, Portugal and Switzerland. CraftWorks Restaurants & Breweries Group will open 10 locations this year.